CONCLUSION Future Outlook of Aviation Industry

India has the potential to become the third largest aviation market by 2020 and the largest by 2030. Indian aviation market offers significant long term opportunities for global players. The partnership of Indian government and industry play major role in improvement of regional connectivity and sustainable development of civil aviation sector in the country. Many Indian states especially in eastern India have proactive measures like Reduction in sales tax on ATF (Aviation Turban Fuel), Development of non- frills airports, Promotion of aviation academics, Supportive policies for airlines and tourism. The next generation of aviation growth in India will be triggered by regional airports. In global scenario the aircrafts transported 3.1billion passengers and around 51.6 million tons of freight in 2013. According to the International Civil Aviation Organization (ICAO), every additional dollar invested in the air transport may leads to the benefits of around 3 dollars to the local economy. It is estimated that the aviation sector, will be needed around 3, 50,000 new employees to ease the growth in the next decade.

The Asia Pacific region is expected to emerge as the largest aviation market by 2032. Indian carriers plan to double their fleet size by 2020 to around 80 aircrafts and civil aviation industry is amongst the top 10 globally.

Conclusion

The Indian aviation industry has witnessed a tremendous growth in the recent years driven by a number of macroeconomic, demographic, government reforms and market lead dynamics. The industry suffers huge losses because its operational costs are very high, its not even reached break-even. Price transparency of the system is both a boon and a bane. A bane as it enhances the chances of collusion. Parties entering the collusion find it easy to ensure cooperation as the follower will implement the price increase only after seeing the leader make the agreed changes.

Slot constraint is another problem. Landing and taking off flights are referred to as slots. These slots are an important consideration for the entrant as peak timed slots register heavy passenger load factors as compared to the oddly timed slots. From being primarily a government owned industry, the Indian aviation industry is now dominated by privately owned full service airlines and low cost carriers. As compared to other means of transport, there is a large gap in terms of speed which saves a lot of valuable time, and hence is preferred by most business travelers to fly frequently.

COMPARISON WITH THE GLOBAL PLAYERS

Introduction
The Aviation Industry has been growing on a steady rate since last ten years because of the rise of many countries such as India, China from South East Asian Region, Brazil, South Africa, South American and African regions respectively.

Domestic vs. International Travel

Millions of people from India and other foreigners travel frequently for business and leisure needs like tourist destination in India.

Comparing 2007 year to the date to the same time period in 2006, these major carriers saw international travel increased by 5% which is faster than domestic travel, which was relatively flat.

The Indian domestic airline sector is very competitive for offering cheap international flights compelling to international carriers like KLM, British Airways, Lufthansa and Cathay Pacific to cut back on high taxes and other charges.

In Comparison with United Kingdom

British Airways is one of the worlds largest international airlines and the UKs largest international scheduled airlines, carrying almost 35 million passengers worldwide annually on around 800 daily flights. The employees of Aviation sector constitute around 40000 people. British Airways flies to more than 170 destinations in over 80 countries.

In comparison with USA

The USA stands as a good example of a civil aviation sector running under regulation, followed by de-regulation and market re-alignment. Commercial aviation is the major source for modern

American economy with more than $1 trillion in annual economic return and also support local economies and generates new markets at home and abroad.

PEST ANALYSIS of INDIAN AVIATION INDUSTRY

A pest analysis is an analysis of the external macro-environment that affect all the firms. PEST stands for Political, Economic, Social and Technological factors of the external macro-environment.

Political Factors
Political environment affects Airline industry because an unstable political environment causes uncertainty in the minds of air travelers. International airlines are greatly affected by trade relations that their country has with the others. Another aspect is that countries with high corruption levels like India, bribes have to be paid for every permit and license required.

Economic Factors
After September 11 incidents, the world economy plunged into global recession due to the sentiment of the consumers. In India, even a company like Citi bank cut down its cost to increase its profits. The airline was facing loss and it led to higher operation cost due to low demand and higher insurance cost.

Social Factors
In a country like India, different people earn different income. So the airlines have to recognize these individuals and serve them accordingly. Airlines should focus mostly on low income clients so that they will be satisfied. People also come from different religions and casts and the airlines have to treat them accordingly.

Technology Factor
Now a days internet has been providing mainly opportunities to the airlines. Eg: Air Sahara with the help of internet manages to auction unoccupied seats before one week prior to the departure. Air India provides many internet based services to its customers such as online booking and handling customers complaints.

The airport authority of India is developing modern communication, navigation etc.

Mergers and Acquisition

Combination of two or more companies into one business. The main reason for mergers and acquisition was to reduce price competition and to operate on high scale so to resist new players from entering the industry even before the existing players could stabilize their operations.

Tata Sons Ltd joint venture with Singapore Airlines Ltd. (SIA)
Tata will hold majority stake of 51% of the venture and Singapore Air the remaining of 49. Both the companies entered into an initial agreement for the $100million investment.

Jet Airways Acquiring with Etihad:

Etihad bought a stake of 24% in Jet airlines for $379 million last year after the government eased the foreign direct investment policy to allow a 49% holding to foreign currency in India.

Air India Merged with Indian airlines:

On 15th July2007, Indian Airlines and Air India merged and started to operate as a single entity. The merger had created a mega company with combined revenue of Rs150 billion ($3.7 billion) and an estimated fleet size of 150

Air Deccan merged with the Jet Airways to form Air Sahara:
The main objective of the mergers is to ensure the sources of the supply. The deal was for Rs 2300 crores, Jet market share 43%, Jet valued Sahara at 1450 crores and Jet acquired only the assets.